New amendments on condo conversion introduced

After months of delays, the end may be near in the long-fought battle over condo conversion.

Legislation by Supervisors Mark Farrell and Scott Wiener that would allow Tenancy-in-Common owners to bypass the city’s condo conversion lottery had been stalled at committee by concerns that it would reduce the number of rental properties in the city.

On Monday, Supervisors David Chiu and Norman Yee introduced an amendment backed by tenant advocates that would allow TIC owners to convert to condominiums with better interest rates and refinancing options, in exchange for at least a 10-year suspension of the lottery system that allows about 200 converts a year out of about 2,500 applicants.

“We’ve crafted an ordinance that will help solve the problems of the TIC owners but also ensure there are strong protections for residents so we don’t jeopardize rent-controlled housing,” said Sara Shortt, executive director of the Housing Rights Committee, at a rally before the Land Use & Economic Development meeting.

TICs are a popular option for San Franciscans looking to be first-time homeowners at a lower cost than buying a condo or single-family home. But TIC owners have seen the mortgages on their multiunit properties skyrocket in a poor economy and Farrell is seeking to help them avoid foreclosure with a $20,000 conversion fee that would go toward affordable housing.

“I appreciate the intent of the original legislation,” Chiu said at the rally. “But if we allow the current generation of TIC owners to convert, we will quickly replace them with a new generation of TIC owners . . . and that’ll lead us back to the same debate we’re having today.”

The maximum length of the lottery suspension is calculated by dividing the number of converted units by 200. If 2,400 units were to convert under the amendments, the lottery would be suspended for 12 years. That number could be reduced depending on how many affordable housing units the city creates.

In future lotteries, only buildings with four units or less would be eligible, unlike the five and six-unit buildings that currently qualify. The amendments would also change occupancy requirements for conversion from one owner occupant to two in three-unit buildings, and three owner occupants for four-unit buildings.

Supervisor Mark Farrell said he is concerned about some parts of the amendment like the 10-year suspension, but would support the changes.

“I do believe we have a framework to move forward and do so quickly,” said Farrell, who added that he hopes to reach an eventual compromise that could pass the board unanimously and avoid taking the issue to the ballot. “What’s being introduced today is a far cry from where either side started.”